44 THE QUEENS COURIER • JUNE 28, 2018 FOR BREAKING NEWS VISIT WWW.QNS.COM
BY JOHN SAVIGNANO, CPA
Questions continue to pour in.
Not surprisingly, most are on the
new tax law. Now that the individual
tax filing deadline has passed,
people are starting to focus on
their taxes for 2018. We’ll share
some inquiries and our answers.
• Can I still deduct IRA custodial
fees?
• No. The write-off for Schedule
A miscellaneous deductions is
gone, beginning with 2018 returns
filed next year. These include
investment account management
fees, tax preparation fees and unreimbursed
employee costs.
• I recently left my full-time job,
and I’m now an independent freelance
writer. Can I claim the new
20% deduction for pass-through
income?
• Generally, Yes. It applies not
only to individual owners of passthrough
entities such as partnerships
and LLCs, but also to
self-employed individuals who
file Schedule C with their returns.
An important limitation applies
to high earners in certain service
fields. They include health, law,
accounting, consulting, financial
and brokerage services, performing
arts, athletics, actuarial science,
investing or trading in securities,
or any business where the principal
asset is the reputation or skill of its
employees. If you’re in one of the
affected fields and your total taxable
income exceeds $315,000 for
joint returns and $157,500 for all
others, the 20% deduction begins
to phase out. It’s zero once your
taxable income exceeds $415,000
for couples…$207,500 for others.
• Did the new law end the deferral
of 100% of gain through likekind
swaps?
• No. It survives, but only for
exchanges of real estate not held
primarily for sale. So, when investment
or business real estate is
exchanged for similar real property,
any gain that would otherwise
be triggered if the property was
sold can be deferred. Prior to 2018,
this break also applied to like-kind
swaps of personal property such
as heavy equipment, machinery,
computers, railroad cars and airplanes.
• I converted a traditional IRA to
a Roth IRA last year, and it has lost
money. Do I still have to undo the
switch?
• Yes, you have until Oct. 15,
2018, to eliminate the tax bill by
transferring the converted funds
back to a traditional IRA. This
is called a recharacterization. If
you’ve already filed your 2017
return and paid tax on the conversion,
you can file an amended
return on Form 1040-X to seek
a refund. Roth conversions done
after 2017 are irreversible. You still
have the ability to convert your
traditional IRA to a Roth, but you
won’t be able to undo it later.
• I’m thinking of adding solar
panels to my home. Can I still get
a tax break?
• Yes, you can claim a credit
for 30% of the total cost. For
solar energy systems installed in
a residence, the full credit applies
through 2019 and then phases
out… 26% for 2020 and 22% for
2021…until it ends after 2021.
Ditto for the breaks for geothermal
heat pumps, residential wind turbines
and fuel cell property. What
if I put in energy-efficient windows
or doors? You’re out of luck,
for now. The limited tax credit
for these residential energy-saving
items lapsed after 2017.
John Savignano is a partner
with Savignano Accountants &
Advisors located at 47-46 Vernon
Blvd., Second Floor, in Long Island
City. If you have any questions or
require additional information,
please call John at 718-707-0955.
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Salvatore P. Candela, EA, ATA, ABA
Enrolled Agent - Tax Advisor
scandela@thetaxadvocategroup.com
www.thetaxadvocategroup.com
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